North Kensington, Randwick: Council move to block affordable housing in eastern suburbs

A bougie community in Sydney’s east — where homes sell for an average $3.4 million – could be spared from a Government plan to see affordable housing built. See why councillors stepped in.

A Sydney council has moved to block NSW Government plans for affordable housing to be built in an affluent eastern suburbs community – where the median house price reaches an eye-watering $3.4 million.

Randwick councillors objected to NSW Planning Department proposal to reinstate an affordable housing investigation area in North Kensington as part of a “comprehensive planning proposal”, instead limiting the housing stretegy to West Randwick.

The median house price for homes in Randwick over the past year average $3.1 million, while units average at $1.025 million.

North Kensington and West Randwick were raised as affordable housing investigation areas.

Council officers told councillors the department advised that it was considering reinstating the North Kensington and part of West Randwick into the local government area’s Housing Investigation Area plans.

“(Council) recommends amending the Housing Investigation Area Affordable Housing Plan to include these Housing Investigation Areas only in the event that the department reinstates these areas into the Comprehensive Planning Proposal,” council officers said.

However, councillors moved to exclude North Kensington from the proposal, while authorising officers to include the affluent Sydney suburb “only if the Department of Planning and Environment reinstates these areas as part of the final Comprehensive local environment planning amendment”.

Homes in Kensington sell for an average of $3.4 million. (PICTURES BY JULIAN ANDREWS).

The move to prevent increased affordable housing in North Kensington by councillors comes as the NSW Planning Department raised concerns over council’s move to see developers fork out contribution rates of 10 per cent for affordable housing in local housing investigation areas.

“This 10 per cent contribution rate has not been tested to be viable,” a NSW Planning representative said in a letter to council.

The planning representative said feasibility analysis by council found “higher contribution rates – including 5 per cent and 7 per cent – would not be viable”.

The contribution rates were also criticised by a Sydney construction boss, who hit out at a push for developers to be burdened with providing more affordable housing as part of major projects, claiming it is “no longer feasible” to keep building houses.

CIMIC Group executive general manager, George Sassine, told councillors he was concerned that forcing developers to pay for a larger portion of affordable housing in major developments would result in “a further [housing] crisis”.

Cimic Group executive general manager for investments and group property George Sassine.

Mr Sassine said the construction industry had “seen unprecedented inflation”, leading to bankruptcies, with CoreLogic Australia’s construction cost index – which is the cost to build a new home – had risen 12 per cent over the past 12 months, with a similar rise the year before.

“As a result, CoreLogic’s research notes that dwelling approvals have dropped 41 per cent since March 2021 as it is simply unaffordable for people to build,” he said.

Mr Sassine – who’s worked in the construction industry for more than 35 years – said the current housing shortage crisis is “like never before”, calling for more housing to be constructed.

Despite accepting the need for affordable housing, a “frustrated” Mr Sassine said “we also need more housing” for the wider community.

Councillors ultimately voted to reduce the contribution rate to three and five per cent in major affordable housing zones.